Ore. Defense Contractor Target Of Contract-Rigging Investigation

HOUSTON, TX - JULY 13: General view of the Bob Casey U.S. Courthouse July 13, 2006 in Houston, Texas. Three former Natwest bankers have been extradited from the U.K. to stand trial here for fraud charges related to the fall of Enron. (Photo by Dave Einsel/Getty Images)File photo of a courthouse. (credit: Dave Einsel/Getty Images)

GRANTS PASS, Ore. (AP) — Federal authorities are investigating whether a U.S. Army Corps of Engineers program manager made sure an Oregon defense contractor won nearly $160 million worth of contracts as part of a cozy relationship that included snowboarding and fishing vacations, trips to Singapore and Bali, and sex with female employees.

Affidavits filed in U.S. District Court in Eugene outline findings and statements from investigation that Jerry Hodgson, a program manager for the corps in Omaha, Neb., rigged bids on eight contracts dating back to 2004 for Sky Research Inc. of Ashland. The company specializes in aerial surveys of old military bombing and gunnery ranges to find unexploded weapons.

No charges have been filed.

Assistant U.S. Attorney Sean B. Hoar said the investigation is ongoing.

“We take seriously our role as a financial steward of the public’s money and the trust that is put into us,” said corps Omaha District Assistant Special Counsel Tom Tracy. “We are looking into the allegations, and taking them seriously.”

An attorney for Hodgson said the allegations against his client were unfounded.

“Mr. Hodgson has enjoyed a long and distinguished career with the Omaha District of the Army Corps of Engineers,” his attorney Andrew D. Strotman said in an email. “These allegations are unfounded and inaccurately portray the contracting practices of both Mr. Hodgson and the Omaha District.”

Attorneys for Sky Research owners Sky and Anne Sky did not immediately return calls for comment.

The investigation was first reported by the Eugene Register-Guard.

Based on the affidavits, U.S. District Magistrate Judge Thomas Coffin in Eugene authorized search warrants that seized computers and records from offices of Sky Research in Oregon and Colorado and the homes of owners Sky (his singular legal name) and his wife Anne Sky, as well as Hodgson’s personal email account, according to court records unsealed this week.

The investigation focused on potential charges of bribery of a public official, conspiracy to defraud the United States, wire fraud, padding bids and bid rigging, affidavits said.

U.S. Army Special Agent Derek W. Lindbom wrote that the investigation was sparked by a confidential informant who contacted the Army’s inspector general in 2010 with allegations against Hodgson and Sky Research.

When an investigator interviewed Hodgson, he admitted taking his kids on annual snowboarding vacations with Sky and his kids, the affidavits said. Shown invoices for a fishing trip to Alaska paid for by Sky, Hodgson said he paid him back in cash, but couldn’t recall which account he had withdrawn the money from.

Hodgson also acknowledged having a romantic relationship with one woman who worked at Sky Research, which included sex, and having sex with two others, an affidavit said. One former Sky Research program manager said she was fired after refusing to have sex with Hodgson.

Hodgson denied statements from women who worked at Sky Research that he sat in on hiring interviews for women who would be working with him.